(Solow) Productivity Paradox (Stair & Reynolds, p. 68):
Solow, R. (1987) "We see computers everywhere except in the productivity
statistics."
Roach, S. (1987) America's White-collar Productivity Dilemma;
Cap. investments per information worker up.
Number of information workers up.
Output per information worker down (6.6%).
"We have in essence isolated America's productivity shortfall and shown
it to be concentrated in that portion of the economy that is the largest
employer of white-collar workers and the most heavily endowed with high
tech capital."
Brynjolfsson, E. (1993) The Productivity Paradox of Information Technology:
IT investments small relatively.
At 10% GNP 1993.
Took 30 years to grow to 10% of GNP.
==> contributions to GNP growth small.
ROI < 40% <= .01% mean GNP growth.
Measuring IT productivity (input and output) is difficult, both in manufacturing
and service industries.
IT Investments take time to generate returns (adjustment, learning, etc.).
IT implementations have suffered from mismanagement.
Statistics are based on aggregates rather than analysis of individual
firms.
Landauer, T. (1995) The Trouble with Computers.
Brynjolfsson, E. & Hitt, L. (1998) Beyond the Productivity Paradox:
Productivity (input/output) is hard to define/measure.
Firm-level studies:
Firm-level studies do show productivity gains.
Large variation in degree of success (Figure 2).
50% of productivity variation unexplained.
Long term returns better than short term returns (Fig. 3).
Problem: Why are the returns high in the long
run? What happens in the mean time?
